Depletion of SNT Not Irreparable Harm for Injunction to Continue Coverage

The Seventh Circuit Court of Appeals rules that the potential depletion of a Medicaid beneficiary’s special needs trust on private nursing care while the beneficiary challenges Wisconsin’s decision to reduce her Medicaid benefits does not constitute irreparable harm for purposes of obtaining a preliminary injunction. D.U. v. Rhoades (7th Cir., No. 2:13-cv-01457, June 3, 2016).

D.U. was seriously injured in a car crash when she was three years old. A lump sum from the settlement was placed in a special needs trust for D.U.’s benefit, along with a monthly annuity. After the crash, D.U. began receiving Medicaid benefits, including private duty nursing services. However, in 2013, the Wisconsin Department of Health Services (DHS) rejected D.U.’s request for continued private duty nursing services, finding that she had not documented a need for at least eight hours of services per day, which was the minimum amount needed in order for Medicaid to provide private duty services.

D.U. filed suit against DHS in federal court and requested a preliminary injunction to compel the state to continue to provide private duty nursing while the case proceeded. As part of her request for an injunction, D.U. claimed that she would suffer an irreparable harm if the injunction was not granted because she was being forced to spend all of the funds in her special needs trust on private nursing care while her case moved through the system. The trial court denied D.U.’s request, finding that D.U. had not demonstrated a likelihood of success on the merits of her claim. D.U. filed an interlocutory appeal, arguing that the court misapplied Early and Periodic Screening, Diagnostic and Treatment (EPSDT) standards when assessing her claim.

The U.S. Court of Appeals for the Seventh Circuit agrees that D.U. has demonstrated a likelihood of success on the merits but it affirms the trial court’s decision after determining that D.U. has not shown that irreparable harm will result if her request for an injunction is denied. The court finds that “[b]ecause money damages could make D.U. whole again should she prevail in her lawsuit, she does not meet the standard for irreparable harm . . . D.U.’s attorney asserted that there was no mechanism in Wisconsin law for obtaining a refund of the money expended on skilled nursing. But if D.U. prevails on the merits of her suit, a federal court order will provide the only process required.”